Interferons, cytokines such as IL-4, IL-6, and IL-10, and hematopoietic growth factors such as granulocyte-macrophage colony stimulating factor (GMCSF) play critical roles in the initiation, promulgation, and resolution of chronic inflammation. Their participation in the pathogenetic mechanism of several autoimmune diseases is well established. One of the more important processes in chronic immune inflammation is cell mediated immunity, of which the primary cell type is the monocyte/macrophage. By way of its wide variety of soluble secreted mediators, the macrophage becomes an important player in mediating TH1 type responses. One of the predominant cytokines characteristic of this response is interferon-gamma (IFN). The other T cell response, TH2, is characterized by secretion of cytokines such as IL-4 and IL-10. In addition, growth factors such as GMCSF give cells such as macrophages and neutrophils a survival advantage in sites of inflammation. Clearly, understanding how these cytokines and interferons interact to modulate cell functions is critical to potential manipulations that would allow better control of chronic inflammation. We have focused on the interactions of IFNs and cytokines with peripheral blood monocytes and lymphocytes, and how these cells modulate the expression of various early response genes that we think are critical to maintaining chronic immune inflammation. We have shown that several genes are transcriptionally regulated by IFN including such genes as the Fc-gamma receptor I. Within the promoter of this gene is an enhancer element referred to as the gamma response element (GRR). We have gone on to characterize a complex of DNA-binding proteins that act as transcriptional enhancer by binding to this GRR element. We have gone on to show that within this complex is the protein p91 or STAT1-alpha. Using electrophoretic mobility shift assays with the GRR sequence, we have shown that other cytokines unrelated to IFNs also activate proteins that bind to the GRR and that the activation occurs by tyrosine phosphorylation of GRR binding proteins. Included in this group of cytokines is GMCSF, IL-6, IL-5, IL-4, IL-10, prolactin, growth hormone, and erythopoietin. All these cytokines activate latent transcription factors that bind to the GRR sequence. Some of these cytokines activate p91 by tyrosine phosphorylation, other activate other p91 related molecules. The regulation of the activation of these factors is critical to our understanding of their role in chronic inflammation. We have shown that activation of these factors by IFN can be down-modulated in cells that have been exposed to IFN. Yet these same cells can still respond to GMCSF. These cytokines also share a family of ty;rosine kinases (tyk2/Jak family) that are essential signal transduction. How these kinases intergrate into the cascade will have important implications for the control of chronic inflammation.